The Debt Office and the Effective Debt Management Functions: An Institutional and Operational Framework

Cosio-Pascal, Enrique
Oct 2006
The paper aims to be a useful analytical and managerial support tool for the debt practitioners and for the academia. It provides an appropriate approach for developing countries, and offers a detailed and systematic blueprint in how to establishing an efficient Debt Management Office. This paper differentiates from other papers published on the subject at least in two aspects. The first one is the political relevance that is given to the decision making process as far as responsibility for fixing a global macroeconomic public debt management strategy is concerned. The second is that the approach is a functional analysis, that is, there is no need to have a specific structure for the debt office in order to analyse who and where the functions are carried out. The paper gives a clear and well-defined list of tasks for each one of the functions, and this leads to clear and structured functional responsibilities for the implementation of the back, middle and front office working organization structure. This paper is composed of five sections. The first one is an introduction to the concept of Effective Debt Management Functions. The second and the third are the description of the functions: the second for the Executive Functions, which are not necessarily a Debt Management Office (DMO) responsibility, and the third to the Operational Functions, which are the direct DMO responsibilities. The fourth section is devoted to the responsibilities that a DMO can be accountable for, that may vary from country to country. The last section addresses major issues on debt management, stressing the pragmatic analysis that the functional approach provides. There are two Annexes with open-ended lists of tasks for each one of the Effective Debt Management Functions.